PRELIM EXAM ACTG 6100

Accounting is also known as the "Language of _________________".

a.

Business

b.

Transaction

c.

Statements

d.

Accounts

The correct answer is: Business

Question 2

Accounting is to maintain systematic and chronological record of financial transactions and to post them
subsequently to the various Ledger Accounts and finally to prepare the Final Accounts to find out the
profit or loss of the business at the end of the Accounting Period.

accounting cycle

The correct answer is: Record Keeping

Question 3

Corporations are supposed to maintain detailed accounts for every transaction. In fact a huge
establishment is needed to maintain the records and accounts and the same will be verified by
independent auditors.

a.

High Legal Start-Up Costs

b.

Extensive Record Keeping

c.

Closely Regulated

d.

Double Taxation
The correct answer is: Extensive Record Keeping

Question 4

Arrange The Accounting Proces(s) Step by Step. (NOTE: MUST BE IN ORDER)

STEP 1: ANALYZING TRANSACTIONS

STEP 2: RECORDING ALL TRANSACTIONS

STEP 3: TRANSFERRING FROM THE JOURNAL TO THE LEDGER

STEP 4: PREPARING THE POST-CLOSING TRIAL BALANCE

STEP 5: PREPARING ADJUSTING ENTRIES

STEP 6: PREPARING AN ADJUSTED TRIAL BALANCE

STEP 7: CREATING FINANCIAL STATEMENTS

STEP 8: CLOSING ENTRIES

STEP 9: FORMULATING AN UNADJUSTED TRIAL BALANCE

You have correctly selected 7.

Arrange The Accounting Proces(s) Step by Step. (NOTE: MUST BE IN ORDER)

STEP 1: [ANALYZING TRANSACTIONS]

STEP 2: [RECORDING ALL TRANSACTIONS]

STEP 3: [TRANSFERRING FROM THE JOURNAL TO THE LEDGER]

STEP 4: [FORMULATING AN UNADJUSTED TRIAL BALANCE]

STEP 5: [PREPARING ADJUSTING ENTRIES]

STEP 6: [PREPARING AN ADJUSTED TRIAL BALANCE]

STEP 7: [CREATING FINANCIAL STATEMENTS]

STEP 8: [CLOSING ENTRIES]

STEP 9: [PREPARING THE POST-CLOSING TRIAL BALANCE]

Question 5

Firms that generally use their employees to provide intangible products or services to customers.

a.

Merchandising Companies

b.

Service Companies

c.

Manufacturing Companies

The correct answer is: Service Companies

Question 6

A corporation is sometimes called a ______________________.

a.

Regular or C-corporation

b.

Cooperatives
c.

Union

d.

Coop

The correct answer is: Regular or C-corporation

Question 7

Involves recording and classifying business transactions, and preparing and presenting financial
statements to be used by internal and external users.

a.

Government Accounting

b.

Financial Accounting

c.

Auditing

d.

Management Accounting

The correct answer is: Financial Accounting

Question 8

It is the cumulative process of recording and processing the accounting events of a company.

a.

The Accounting Cycle

b.

Accounting

c.

Recording of Transactions

d.

Financial Statements

The correct answer is: The Accounting Cycle

Question 9
Since a corporation is a separate legal entity, it must pay taxes on its net income at the state level, and
also at local level. Before stakeholders receive a rupee of its net income and dividends, a corporation
must pay these taxes at the corporate tax rate.

Answer:

21%

The correct answer is: Double Taxation

Question 10

Accounting information is ___________________________.

a.

A source of information for the people looking for job opportunities.

b.

A source of information for the people looking for job opportunities.

c.

All of the above

d.

A source of valuable data for those researching on organizational impacts on individuals and economy as
a whole.

The correct answer is: All of the above

Question 11

Focuses on the search for new knowledge on the effects of economic events on the process of
summarizing, analyzing, verifying, and reporting standardized financial information, and on the effects of
reported information on economic events.

a.

Auditing

b.

Accounting Research

c.

Management Accounting

d.

Accounting Education
The correct answer is: Accounting Research

Question 12

Auditing have three types: Internal Auditing, External Auditing and Management Auditing.

True

False

The correct answer is 'False'.

Question 13

They share responsibility equally, make collective decisions on the basis of one person one vote and
mostly receive equal pay.

a.

Corporation

b.

Partnership

c.

Cooperatives

d.

Sole Proprietorship

The correct answer is: Cooperatives

Question 14

Because the company is a separate legal entity, it allows investors to limit their liability to the total
amount of their investment in the business.

True

False

The correct answer is 'True'.

Question 15

Accounting is means and an end.

True

False

The correct answer is 'False'.

Question 16

He is the "The Father of Accounting and Bookkeeping"

a.

Luca Pacioli

b.

Chanakya

c.

Karl Marx

d.

Max Weber

The correct answer is: Luca Pacioli

Question 17

The bureaucratic habit of the company officials is to shirk troublesome initiatives because they get no
direct benefit from it and often retards growth.

a.

Bureaucratic Process

b.

Bureaucratic Habbit

c.

Bureaucratic Theory

d.

Bureaucratic Approach

The correct answer is: Bureaucratic Approach

Question 18

An agreement among two or more persons to carry on jointly a lawful business and to share the profits
arising there from.

a.

Sole Proprietorship

b.
Corporation

c.

Cooperatives

d.

Partnership

The correct answer is: Partnership

Question 19

The Company form of organization generally encourages reckless speculation on the stock exchange.

True

False

The correct answer is 'True'.

Question 20

AAA stands for ___________________________.

a.

Americans Accountants Association

b.

American Accounting Association

c.

America of the Accounting Association

d.

American Accounting Associating

The correct answer is: American Accounting Association

Question 21

According to the features of Partnership there is only an oral agreement among the partners in terms of
Contractual Relationship.

True

False

The correct answer is 'False'.

Question 22
They buy materials, convert them into products and then sell the products to the other companies or to
the final customers.

a.

Manufacturing Companies

b.

Merchandising Companies

c.

Service Companies

The correct answer is: Manufacturing Companies

Question 23

AICPA stands for ______________________________________.

a.

Australian Institutions of Certified Public Accounts

b.

Americans Institutions of Certified Public Accountants

c.

Americans Institutions of Certified Public Accounting

d.

American Institute of Certified Public Accountants

The correct answer is: American Institute of Certified Public Accountants

Question 24

Sell tangible products. This type of business buys finished or almost finished goods from their supplier
and resell the same to customers.

Manufacturing Companies

b.

Service Companies

c.

Merchandising Companies
The correct answer is: Merchandising Companies

Question 25

Is concerned with the allocation and utilization of government budgets.

a.

Government Accounting

b.

Management Accounting

c.

Budgeting

d.

Auditing

The correct answer is: Government Accounting

Question 26

Refers to the recording, presentation, and analysis of manufacturing costs.

a.

Cost Accounting

b.

Management Accounting

c.

Auditing

d.

Tax Accounting

The correct answer is: Cost Accounting

Question 27

It is the art of recording, classifying, and summarizing in a significant manner and in terms of money,
transactions and events which are, in part at least of financial character, and interpreting the results
thereof.

a.

Business Management
b.

Business Finance

c.

Marketing

d.

Accounting

The correct answer is: Accounting

Question 28

This branch of accounting deals with developing future accountants by creating relevant accounting
curriculum.

a.

Accounting

b.

Accounting Education

c.

Management Accounting

d.

Accounting Research

The correct answer is: Accounting Education

Question 29

There are Two Types of Merchandising Companies: Internal and External Merchandising.

True

False

The correct answer is 'False'.

Question 30

Helps clients follow rules set by tax authorities. It includes tax planning and preparation of tax returns.

a.

Accounting

b.
Tax Accounting

c.

Cost Accounting

d.

Auditing

The correct answer is: Tax Accounting

Question 31

According to ____________________ “the relation between persons who have agreed to share the
profits of a business carried on by all or anyone of them acting for all”

a.

Section 4 of the Partnership Act, 1932

b.

Section 1 of the Partnership Act, 1932

c.

Section 4 of the Partnership Act, 1931

The correct answer is: Section 4 of the Partnership Act, 1932

Question 32

Is a business owned and managed by a single individual.

a.

Partnership

b.

Corporation

c.

Cooperatives

d.

Sole Proprietorship

The correct answer is: Sole Proprietorship

Question 33

Answer
Internal users

users use a mix of management and financial accounting information.

Feedback

The correct answer is: Internal

Question 34

Accounting is an art of recording, classifying, summarizing and finalizing the financial data. The word ‘art’
refers to:

a.

The way of recording something

b.

The way of classifying something

c.

The way of performing something

d.

The way of analyzing something

The correct answer is: The way of performing something

Question 35

The User(s) of Accounting Information are divided into two groups - the External Users and the Internal
Users.

True

False

The correct answer is 'True'.

Question 36

Accounting is recognized and characterized as a storehouse of information.

a.

Accounting is an art

b.

Accounting is means and not an end

c.
Accounting is an information system

d.

Accounting deals with financial information and transactions

The correct answer is: Accounting is an information system

Question 37

One of the major roles of management is not to set rules and procedures to achieve organizational goals

The correct answer is 'False'.

Question 38

Recording all transaction is the second stage in Accounting Process.

True

False

The correct answer is 'True'.

Question 39

Uses historical as well as estimated data to generate useful reports and information to be used by
internal management for decision making purpose.

a.

Accounting Reseach

b.

Government Accounting

c.

Management Accounting

d.

Financial Accounting

The correct answer is: Management Accounting

Question 40

It can enter into binding contracts, buy and sell property, sue and be sued, be held responsible for its
actions, and be taxed

a.

Cooperatives
b.

Partnership

c.

Corporation

d.

Sole Proprietorship

The correct answer is: Corporation

Question 41

Just because of limited liability, corporations have proved to be the most effective form of ownership for
accumulating large amount of capital.

a.

Ease of Ownership Transfer

b.

Ease of Raising Property

c.

Limited Liability

d.

Ease of Raising Money

The correct answer is: Ease of Raising Money

Question 42

"Accounting is an art". Is this statement correct?

True

False

The correct answer is 'True'.